The world’s most successful credit scoring consumer in human history
and the founder of America’s largest issuing CRA for the communications
industry says advertisement may be misleading to many

May 25, 2017 04:42 PM Eastern Daylight Time

WEST PALM BEACH, Fla.--(BUSINESS WIRE)--SubscriberWise,
the nation's largest issuing CRA for the communications industry and the
nation’s leading protector of children victimized by identity fraud,
announced today company founder and global master-champion all-time
worldwide highest FICO and Vantage Score achiever David
E. Howe has contacted Credit
Karma public relations with concerns involving a TV advertisement
that may inadvertently mislead current and future members of the credit
and financial educational site.

“Yesterday I watched an advertisement from Credit Karma involving what
appears to be a prospective tenant and her landlord,” said David Howe,
SubscriberWise founder and FICO worldwide highest achiever since Alan
Turing invented the computer. “Near the conclusion of the commercial,
after the prospective renter expressed interest for the unit, the
landlord inquired about the renter’s credit. The renter responded to the
request by showing her Credit Karma scores on her personal device. The
landlord glanced at the scores and instantly offered an approval, based
on what must have been favorable credit from her perspective.

“Although I eagerly acknowledge that Credit Karma didn’t produce this
content to mislead or misinform consumers in any way, this particular
advertisement nevertheless has the possibility of giving consumers an
inaccurate understanding of the strict federal regulations that are
required for permissible-purpose
access to federally regulated consumer credit products for underwriting
purposes -- including for individuals seeking apartment rentals and
other access to credit,” Howe commented.

“The fundamental concern with the advertisement is that Credit Karma is
not approved for underwriting purposes and some -- if not many --
consumers watching this advertisement may not understand how the federal
government strictly regulates credit products and scores for this
purpose. Some consumers watching the ad may actually believe that they
can rely on their personal Credit Karma account to obtain approvals from
landlords and creditors in the way depicted in this advertisement.
Worse, they may expect landlords and credit grantors to imitate this and
other scenarios. And while Credit Karma may predict outcomes with
profound accuracy based on their modeling, ultimately the creditor sets
the terms.

“So there are many good reasons why consumers cannot and should not rely
on Credit Karma in this way,” added Howe.

“Let’s say in this same scenario, if the prospective renter revealed
what may be considered adverse credit to the landlord, the landlord
instantly denied based on the Credit Karma score -- then there could be
a violation of federal law because the landlord may not have access to
other critical information which would have to be part of a legally
required response.

Moreover, it’s also possible that the landlord would violate federal ‘Red
Flag’ rules because Credit Karma doesn’t comply with current laws
related to Red Flags since the company is not currently engaged in
underwriting and approval from the standpoint of existing federal
requirements, at least in the capacity presented in this advertisement.

Specifically, in addition to Red Flags and any other regulatory
requirements, the landlord would be required to provide score reason
factors derived from the credit report and also listed in the order of
the most significant factor to the least in terms of the impact on the
scores.

“Credit Karma, in its current commercial application, does not currently
meet the stringent federal requirements for FCRA underwriting
requirements and it’s imperative that current and future members clearly
understand this fact,” Howe emphasized. “It’s also imperative Credit
Karma members understand what their federal rights are when adverse
credit translates into denial or less favorable terms (https://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-reporting-act.pdf).

“And just to reiterate, I know that Credit Karma didn’t intend to
mislead or misinform consumers in this ad. Rather, I’m convinced, their
goal is to continue to expand membership while also empowering
individuals with credit knowledge at the same time exposing the myriad
ways that credit plays a critical role in our lives today. Credit
education, for the record, is the primary reason I
recommended Credit Karma last year.

“Yes, the Credit Karma site does an excellent job achieving their
goals,” concluded Howe. “I would even argue that this particular
advertisement does deliver an overall positive message, despite this
important weakness that I feel compelled to point out.”

SubscriberWise® launched as the first issuing consumer reporting agency
exclusively for the cable industry in 2006. In 2009, SubscriberWise and
TransUnion announced a joint marketing agreement for the benefit of
America's cable operators. Today SubscriberWise is a risk management
preferred-solutions provider for the National Cable Television
Cooperative.

SubscriberWise is a federally registered trademark of the SubscriberWise
Limited Liability Co.